Asia’s spot market for very low sulphur fuel oil (VLSFO) traded in discounts on Thursday for December loading dates, with cash differentials sliding to their lowest since mid-April this year.
The product traded at a discount of 25 cents a metric ton to cargo quotes for the prompt laycan, while offers also trended down for later dates in December.
High sulphur fuel oil (HSFO) benchmarks also continued to soften, with offers slipping day-on-day into narrower premiums.
Onshore inventories of fuel oil in Singapore dropped slightly week-on-week but remained higher than last month’s average, official data showed on Thursday.
Supply inflows remained strong in the week to Dec. 4, with most imports hailing from the United States, Saudi Arabia and Indonesia, excluding cargo movements from Malaysia.
Arbitrage barrels from the West have remained strong, while Middle Eastern supplies and regional supplies from Asian refiners were also seen rangebound, according to trade sources.
Meanwhile, most fuel oil outflows out of Singapore storage tanks were headed for South Korea, China and Bangladesh in the week.
INVENTORY DATA
– Singapore onshore fuel oil stockpiles STKRS-SIN fell 2.3% to 18.79 million barrels (about 2.96 million metric tons) in the week to Dec. 4, easing to two-week lows, based on Enterprise Singapore.
OTHER NEWS
– Oil prices were up slightly on Thursday ahead of an OPEC+ meeting later in the day, with investors waiting to see what the producer group would do next on supply cuts while also monitoring geopolitical tension in the Middle East.
– Three trading houses have become dominant sellers of Russian oil to India as many smaller players dropped out of the business due to high funding costs in Russia and lack of access to Western funds, according to data and six trading sources.
– Shell completed a two-month-long maintenance shutdown at its 400,000 barrel per day Pernis oil refinery in Rotterdam in the Netherlands on Wednesday and is currently restarting units at the plant, the company said.
– U.S. crude stocks fell by more than expected last week as refiners ramped up operations, offsetting a rise in crude imports, the Energy Information Administration (EIA) said.
WINDOW TRADES O
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuter (Reporting by Jeslyn Lerh; Editing by Tasim Zahid)